Present - representatives of:
Association of Chartered Certified Accountants (James Meyrick); British Chambers of Commerce (Charlotte Moore-Bick); British Beer and Pub Association (Pamela Bates); British Retail Consortium (Ed Cooke); CBI (Emma Wild); Communities and Local Government (Rob John); Country Land and Business Association (Charles Trotman); Engineering Industries Association (Colin Mason); Federation of Small Businesses (Roger Culcheth); Forum of Private Business (Tim Kind); Institute of Directors (Richard Baron); Inter Bank Rating Forum (Roger Littlewood); Local Government Association (Carla Heath); Petrol Retailers Association (Paul Yates); RICS (Charles Partridge, Jerry Schurder) RSA (Denise Trollope); Small Business Service (Danish Chopra); Welsh Assembly Government (David Fletcher);
Valuation Office Agency (Andrew Hudson, David Tretton, Steve Bliss, Lesley Searle, Lynda Rawsthorne, Louise Tapsell, Ann Ryniejski, Tony Capp).
Apologies
Action for Rural Communities in England (Deborah Clarke); Boots (Andrew Martin); British Council for Offices (Ian Selby); British Hospitality Association (Martin Couchman); British Property Federation (David Melhuish); Fuller Peiser (Mike Flecknoe); IRRV (Tom Dixon, Roger Messenger), National Pharmacy Association (Raj Nutan), RSA (Blake Penfold), Valuation Tribunals Service in Wales (Chris Owen)
1 Minutes, action points and matters arising from the NRF meeting on 12 September 2006
1.1 The minutes of the meeting on 12 September were accepted as an accurate record. All outstanding action points were covered in the current agenda.
2 HMRC Review of Links with Large Businesses
2.1 This item was postponed to a future meeting. ACTION POINT (TC)
3 Customer Service update
3.1 Richard Baron said that he hoped the report would refer to the total amount of local government spending that is desirable to help set the context for the amount to be collected from the rating system.
3.2 The Agency ‘s aim was to achieve a customer satisfaction rating of at least 86%, consistent with the best in the public sector, and currently surveyed all council tax appellants, and unrepresented ratepayers (5% of all appellants). The Agency was keen to involve rating agents in the process. Jerry Schurder suggested inviting the top ten agents and businesses involved in rating appeals, who he believed would be happy to discuss customer service issues in detail. This was likely to prompt a more positive response than the issue of survey forms and he confirmed that he would be happy to participate.
3.3 Paul Yates said that whilst surveys were helpful, he had encountered problems in individual cases, which had not always been resolved satisfactorily and had been discussed with senior Customer Service staff. Roger Littlewood said he had similar experiences.
3.4 Andrew Hudson said that he took customers’ problems seriously and always ensured that any issues referred to him are looked at independently. He invited Paul Yates and Roger Littlewood to discuss the issues raised with Lynda Rawsthorne and David Tretton. The NRF had an important role in helping to identify and work through problems, and the consideration of changes to customer surveys will act as catalysts to further improvements. However, the Agency would look again at its survey forms in the light of discussions, taking on board the comments made about “survey fatigue”, trying to make the forms shorter and by building in discussions with agents. A further discussion would take place at the next meeting in September. ACTION POINT (LR/TC)
4 Revaluation 2010 - Discussion paper on prior agreement of rateable values
4.1 Lesley Searle summarised the responses received on the paper on the prior agreement of rateable values, which was circulated to members on 29 January. A copy of Lesley’s presentation is available on request from Tony Capp (tony.capp@voa.gsi.gov.uk).
4.2 Jerry Schurder said that the paper raised many issues and suggested that the RICS response should be made available to all members. Overall he regarded the proposals as unambitious, and thought a radical review of the rating system was required for the benefit of the taxpayer and the country. The VOA needed to retain professional rating staff and this was made difficult by a five yearly revaluation cycle with resultant appeals settled within two years. He hoped that the Lyons Review would recommend more regular rating revaluations and the introduction of periodic revaluations for Council Tax.
4.3 A significant problem with the proposals was that ratepayers only reward agents for success on appeals and were unlikely to pay for involvement in discussions about prior agreement. More frequent revaluations may well change that approach and encourage early engagement. The RICS appreciated the aims and objectives set out on the paper and subscribed to those ideals, which were superficially attractive. However, difficulties existed in how to achieve them.
4.4 Tim Kind said that getting valuations Right First Time was the objective. Small businesses want fairness in their assessment and the introduction of summary valuations had contributed to demystifying the process, but it was important to remember that valuations were used to assess tax levels. The revaluation process was still not widely understood by small businesses. More frequent use of what are regarded by many as complicated procedures was not the solution. A more fundamental review of the system was necessary, not simply changes to the revaluation process.
4.5 Roger Littlewood suggested that lack of understanding could be addressed through education. Legislation had made the rating system over complicated. An example of lack of public understanding was on council tax, where popular myths about the process were exaggerated to a degree where the public became fearful of a council tax revaluation. Andrew Hudson said that the VOA and others were taking action to address these issues and would welcome the involvement of NRF members.
4.6 David Fletcher said that his Ministers had suggested moving to a two yearly rating revaluation cycle along the lines of the Danish model. The Welsh Assembly Government would like more frequent revaluations but agreed that the system had become too complex. The Welsh system was being simplified with the abolition of transitional relief, the abolition of rural rate relief and the introduction of a centrally funded Small Business Rate Relief scheme from April 2007.
4.7 Andrew Hudson noted concerns about wider rating issues, which had been discussed with the Lyons team at the NRF meeting on 12 September. A further discussion may be scheduled after the publication of the Lyons report. David Tretton said that he was encouraged by members’ willingness to review the system, and the aim must be to have a system that is fair, accurate, transparent and as simple as possible for taxpayers, and which offers good value for money for the policy departments. The main issue is on the sharing of data about property and sharing market knowledge which can then be used collectively to arrive at accurate valuations.
4.8 Steve Bliss said that the Agency would look to move ahead with the prior agreement proposals even if that had to be done in small steps. The Agency would draw up a prospectus on the way forward.
Note: Respondents to the paper on prior agreement were contacted after the meeting and with their agreement, copies of all responses were circulated on 14 March 2007.
5 Revaluation 2010 - Publication of information in support of rateable values
5.1 Steve Bliss introduced the paper on the possible publication of rental information to support rateable values, emphasising that it was a discussion paper and there was no commitment to publish information at this stage. Publication of the information was the next logical step following the open publication of summary valuations and schemes at the 2005 revaluation, and would further enhance understanding of the rating system and the link between rents and rateable values, but primary legislation would be required.
5.2 The Forum generally supported the proposals. Roger Littlewood said that in principle he would support publication. Information on agreed rents was already in the public domain with press coverage about deals that had been agreed and he did not believe that there were any confidentiality issues preventing publication by the VOA. In any event, much of the information could eventually be disclosed as part of the appeals process. He agreed that publication would make a significant contribution to demystifying the whole process and enhance the value of valuation schemes.
5.3 There was some concern about making available details of any incentives offered to tenants. However, Charles Partridge believed that the release of the information was important in convincing ratepayers that their rateable values were accurate and he believed that the levels of appeals would fall substantially.
5.4 Steve Bliss said that was encouraged by the responses. The next step would be to formally approach DCLG and the Welsh Assembly Government on the matter and with this in mind invited members to provide written comments as soon as possible, and a note was sent to all members requesting written comments by the end of March. (ACTION POINT – ALL)
6 Revaluation 2005 - Update
6.1 Steve Bliss gave details of the latest position on appeals following the 2005 revaluation, saying that 397,000 valid appeals had been made against the 2005 list (an appeal rate of around 22%), compared with a level of around 850000 at the same point following the 2000 revaluation. A number of factors could have affected the position, including the introduction of small business rate relief and the changes to the appeal regulations, but it did suggest a satisfactory outcome to the revaluation in line with the objectives of “Right First Time”.
6.2 There were currently about 162,000 outstanding appeals (compared with about 700000 in 2002), with appeals being dealt with more quickly than in the past, including those related to material changes of circumstances. Of the appeals that had been settled, 61% had been withdrawn or declared to be invalid, and a further 31% settled by agreement. The remaining 9% had been determined by the Valuation Tribunals, with 7% dismissed and the other 2% decided. Overall, there had been a 0.87% reduction in the total rateable RV compared to an overall reduction of over 5% on the 2000 list.
6.3 Tim Kind said that the appeal rate of 22% looked high in view of the Agency’s Right First Time objectives for the 2005 revaluation. David Tretton said that since 1990 around 60% of properties have been appealed, often with a number of appeals on each property. The Agency hoped to reduce the numbers involved, and the current appeal rate showed significant progress in that regard, but the appeal system was an essential part of a robust property tax system which had the aim of arriving at the correct assessment for each property.
6.4 Roger Culcheth said that small businesses now have much greater confidence in their rateable values and how they have been derived.
7 Policy Update
7.1 The Lyons Report was expected to be published around the time of the Budget The handling of any recommendations in the report would be considered in due course. Andrew Hudson said that following publication of the report, members could consider whether an additional meeting should be called to discuss the outcome of the Lyons Report ahead of the Forum’s next scheduled meeting in September. (Note – the report was published on 21 March and is available from the Lyons Inquiry website at www.lyonsinquiry.org ) David Fletcher said that the Welsh Assembly Government would introduce a Small Business Rate Relief scheme in Wales from 1 April 2007, which would cover 50% of all businesses in Wales. It would replace the rural rate relief scheme and was directed at very small businesses – properties with a rateable value below £2000 would receive relief at 50% of the bill, and those with a rateable value between £2000 and £5,000 would get 25% off. Self catering holiday accommodation was excluded from the scheme, which would be 100% funded by the Welsh Assembly Government (WAG).
7.2 Tony Capp had circulated a note on take up of the Scottish Small Business Rate Relief scheme. Rob John said that take up of the scheme was around 50% in England according to surveys carried out by the Federation of Small Businesses and the Local Government Association.
8 Any other business
8.1 Andrew Hudson said that he was keen to keep an eye on the level of work that the Agency asked ratepayers to do in playing their part in the rating system. It was an issue that had been raised in broad terms during the earlier discussion about customer service issues, and the matter would be included on the agenda for the next meeting of the Forum.
9 Next meeting
9.1 The next scheduled meeting will take place on 17 September. An additional meeting may be arranged at an earlier date to discuss the Lyons Report if there was demand from members.
Tony Capp
Valuation Office Agency
March 2007
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